Question

Crocetti Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit$ 121 Budgeted unit sales (all on credit): January7,000 February7,500 March11,900 April14,900 Credit sales are collected: 40% in the month of the sale 60% in the following month The budgeted accounts receivable balance at the end of February is closest to

Answer 1

$544,500

Step-by-step explanation:

The Trade Receivable Budget is prepared to determine the Accounts Receivable Balance at the end of February.

However the Sales Budget comes first before the Trade Receivable Budget.

Sales Budget :

Month January February March

Units 7,000 7,500 11,900

Selling Price $ 121 $ 121 $ 121

Total Sales $847,000 $907,500 $1,439,900

Trade Receivables Budget :

Month January February

Balance b/f $0 $508,200

Credit Sales $847,000 $907,500

Receipts - 40 % ($338,800) ($363,000)

Receipts - 60 % $0 ($508,200)

Balance c/f $508,200 $544,500